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Market Climate

Personal debt in the UK has exceeded £1¼ trillion, increasing by £1 million every 4 minutes.

With almost 300 people becoming insolvent every day, the business of recommending effective debt management solutions has become an essential part of any advisor’s portfolio. It has become increasingly clear that for many consumers the pressure of keeping up with a deteriorating personal financial situation by the expedient of being able to borrow more money to consolidate is no longer an option.

The need for effective advice in this area has never been more crucial.

Citizens Advice Bureau (CAB) figures in September 2007 showed that:

• Debt enquiries in the UK are running at a record high
• Debt problems have doubled in the last 10 years
• CAB deals with 6600 consumer debt enquiries every day
• Credit card debt and problems with unsecured loans dominated, accounting for 40% of the CAB debt caseload

Consolidation of debt by taking out a secured loan or by remortgage may not be the most appropriate advice, particularly if there is any indication that the client is simply forestalling the inevitable and is likely to fall into arrears.